Here's 9 effective ways you can reduce IT costs

Delivering IT solutions at the appropriate price point is the goal of all CTOs/CIOs and executives running their businesses/enterprises. Some are given a budgetary amount to ensure that "operations run smoothly" without many interruptions.

One of the biggest standing issues in today's companies / enterprises is that with the widely growing usage of IoT, infrastructure, websites, applications and internal databases, you will be hard pressed to find ways out of having some type of cloud/infrastructure roadmap in your yearly plans - or even quarterly plans. Most companies rely on this roadmap to operate efficiently or to deliver products/services to their customers.

Here are some statistics provided by Rightscale:

Cloud infrastructure around the globe has 53.7% preferred market share which has violently grown percentage after percentage since 2012. Traditional infrastructure is right around 47.3% market share with engineers becoming savvier and finding ways to hybridize their IT infrastructure and even finding ways to create their own VMs or containers (See below).

Many believe that the switch back to on premise might be making a comeback. (Link to another article on this topic)

Enterprise cloud spend is significant and growing quickly. Enterprises plan to spend 24% more on the public cloud in 2019 than in 2018 and meanwhile: 8% of enterprises spend more than $12 million a year on average on both public and private cloud while 50% spend more than 1.2 million annually. In the last 15 years, 52% of fortune 500 companies have disappeared and 85% of CFOs agree that budgets need to be re-allocated-

Cloud infrastructure spend being the exception.

Here's another fact: Cloud users are not doing all they can to optimize costs. Despite most respondents listing this issue as a priority, cloud users underestimate the amount of wasted cloud spend. According to Rightscale: respondents estimate 27 percent waste in 2019, while Flexera has measured actual waste at 35 percent.

This is solely due to either over engineered solutions or the lack of brand exposure on other alternative options who might be shadowed by the huge marketing budgets of some of the major hyperscale providers we see everyday.

So with this growing trend that doesn't look to stop anytime soon- here are 9 tips I found to help executives solve these problems to help keep swelling cloud costs to a more bearable level:

1. Restructuring personnel costs

Many IT organizations are top-heavy with personnel which is something that just happens over time. While having experienced people makes it easier to get the work done, it is suboptimal from a cost standpoint. To deal with this, some organizations have periodic reductions in personnel to move their job levels back to reasonable levels. This however can prove troublesome and has consequences as they can cause a great deal of angst in the organization. Which is why hiring third party or contracted positions can sometimes be more effective depending on the type of managed service scope you are looking to achieve.

Any gaps where your current employee skill set lacks?

Hire outside contracted help and try to fill in the holes. Often times, they will not only take on the full responsibility, but save you more time and money in the long run.

2. Reducing non-personnel costs

Obviously, not all costs are related to personnel (however the lionshare of the costs along side with IT budgets can account for most of the overhead at enterprises) There are a number of ways to get creative for a budget conscious CTO/CIO who can cut expenses without losing headcount.

3. Virtualize servers by using containers

It wasn't too long ago that every application used a dedicated server. With this, the roadmap eventually grew and multiplied due to more individual server needs, test environments, etc. Many of these servers had utilization rates so hardware costs became harder to optimize.

The solution: partitioning them to allow multiple applications to share the hardware. Elaborating more on this concept- containers are a great option to save dramatically on costs. Linux containers are self-contained runtime environments that are lightweight and portable. Because services can run on the same box, hardware resource utilization is reduced.

4. Use cheaper hardware

In addition to maximizing hardware utilization using containers, there is often an opportunity to run certain applications on cheaper devices. Now it's not recommended to always go for older hardware, however at times especially when a provider has a decent server that fills your exact needs for your application, depending on your project, could prove advantageous to select an older cheaper hardware spec, rather than the latest and greatest.

Finding out exactly what you need can be done via test environment or by consulting with someone in the industry. (Hello!)

5. Lease instead of own

Storage and hardware no longer need to be on-site and the cost of renting can be much lower than the cost of owning resources. When you utilize the cloud, you essentially do just that, but unfortunately you are only renting a portion of that space on a dedicated server which could result in security and control issues. So why not lease your own servers and create your own container environments and bring back control while reducing costs?

6. Negotiate current software licenses and look into open source software

Open source eliminates the cost of acquiring software as well as the recurring annual maintenance cost which can sometimes outweigh certain benefits. There are some software applications you can't get away from, thus at which point it's always recommended to re-negotiate your licensing as you become a longtime user of a companies software.

Open source has a lot of great perks, with the right community behind certain software allowing access to source code so you can make your own modifications. In addition, code updates are made by developers from many companies so software often improves with continued support.

7. Virtualize databases

Database technology now allows for a core images and the creation of multiple databases that are incremental changes to that core image.

For example, a test DB server may take very little space because it simply points back to the production instance. In addition to saving on storage costs, this can be a great productivity savings for developers. (e.g., imagine the ability to save a database image, run a test cycle, make corrections, and then go back to the original image to run the test again).

8. Take the time to do the right things with your hardware, software and code

This one might be a little hard to quantify, however doing things the correct way the first time like making sure you update your code- software and hardware operating systems can save your developers and team huge amounts of time. The more agile and time saved from a dev-op standpoint, the more they can fluidly- and efficiently be able to complete their necessary tasks.

9. Take the time to vet and select the right provider(s)

This will be the biggest advice I can give to other executives. Coming from a completely unbiased side of web hosting: I truly believe that not every host is the right match for every client and there is no "one size fits all provider" that exists.

With IaaS, PaaS, SaaS and many different billing options from cap ex to op ex, provider diversity is the key when deciding who will host your workloads along with various capabilities via network, global footprint, hardware selection and billing flexibility.